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Saturday, May 12, 2018

The Velocity of Money… and Revolution

If you’re
perfectly comfy with the economy’s gyrations, then pay no attention as I
explain what’s actually going on. Economists have been recognizing signs of
serious dislocation for some time. Even right-of-center fellows like newsletter
mavens John Mauldin and Lacy Hunt have finally recognized the core indications.
I wish I could share their excellent newsletters with you. But – at some risk
of misinterpreting or even treating them unfairly – I intend to paraphrase. And
criticize.

A recent Mauldin missive correctly cites the most disturbing symptom of trouble in the
U.S. economy: a plummet in Money Velocity (MV).

To quote John:“You may be asking, what exactly is the velocity of money? Essentially,
it’s the frequency with which the same dollar changes hands because the holders
of the dollar use it to buy something. Higher velocity means more economic
activity, which usually means higher growth. So it is somewhat disturbing to
see velocity now at its lowest point since 1949, and at levels associated with
the Great Depression.”

Somewhat…
disturbing? That’s at-best an understatement, since no other economic indicator
is as telling. MV is about a bridge repair worker buying furniture, that lets a
furniture maker get dentures, so a dentist can pay her cleaning lady, who buys
groceries….

There are rare occasions when MV can be too high, as during the 1970s
hyper-inflation, when Jimmy Carter told Paul Volcker “Cure this, and to hell with my re-election.”But those times are rare. Generally, for all
our lives, Money Velocity has been declining into dangerous sluggishness,
falling hard since the 80s, rising a little in the 90s, then plummeting.

Alas, while
fellows like Hunt and Mauldin are at last pointing at this worrisome symptom,
they remain in frantic denial over the cause. Absolutely, it is wealth disparity that destroys money
velocity. Bridge repair workers and dentists would spend money – if they had
any.

We have known -
ever since Adam Smith gazed across the last 4000 years - that a feudal oligarchy does not invest in
productive capacity. Nor does it spend much on goods or services that have
large multiplier effects (that give middle class wage earners a chance to keep
money moving). Instead, aristocrats have alwaystended to put their extra wealth into rentier (or passive
rent-seeking) property, or else parasitic-crony-vampiric cheating through abuse
of state power.

Do not let
so-called “tea party” confederate lackeys divert you. The U.S. Revolution was
against a King and Parliament and royal cronies who commanded all American
commerce to pass through their ports and docks and stores, who demanded that
consumer goods like tea be sold through monopolies and even paper be stamped to
ensure it came from a royal pal. Try actually reading the Declaration of Independence. “Taxation without
representation” was about how an oligarchy controlled Parliament through jiggered
districts and cheating, and used that power to funnel wealth upward.

Here’s a fact
that shows where we came from… and might be going: over a third of the land in
the thirteen colonies was owned – tax-free – by aristocratic families.

The U.S.
Founders fought back. After their successful revolt, they redistributed fully a quarter of the wealth and land, and they did
it calmly, without the tsunami of blood that soon flowed in France, then
Russia, then China. That militantly
moderate style of revolution actually worked far better at fostering
positive outcomes for all. For the people… and yes, for local aristocratic
families, who retained comforts, some advantages. And their heads.

Nor was that the
only time Americans had to push back against proto-feudal cheating, which we
now know erupts straight out of human nature. The Civil War was certainly a
massive ‘wealth redistribution’ by giving millions of people ownership of their
own lives and bodies. During the 1890s Gilded Age, we avoided radical
revolution in favor of reform – e.g. anti-trust laws.

Our parents in
the Greatest Generation – who adored FDR – sought to prevent communism by
keeping market enterprise flat, competitive and fair. Far less radical than the Founders, their reforms created the flattest
social structure and the most fantastic burst of economic prosperity, ever.

And dismantling
the work of that generation has been the core aim of the confederate
aristocracy, since Reagan.

== Dire beasties! Debt and the Fed ==

But let me share
with you more of the myopia of decent men. John Mauldin continues: “Debt is another big issue for Lacy Hunt.
People compare debt to addictive drugs, and as with some of those drugs, the
dose needed to achieve the desired effect tends to rise over time.”

John then shows
a chart (he always has the best charts!) revealing the additional
economic output (GDP) generated by each additional dollar of business debt in
the US. Needless to say, the effectiveness of each dollar of debt, at growing
healthy companies, has plummeted.

Um…. Duh? Once
upon a time, the purpose of corporate debt was to gather capital to invest in
new productive capacity (factories, stores, infrastructure and worker
training), with an aim to sell more/better goods and services that would then
produce healthy margins that pay off the debt, across a reasonable ROI (Return
on Investment) horizon.

This would then
actually decrease the net ratio of
debt to company value, across a sapient period of a decade or so.This approach still holds, in a few tech
industries, but not wherever
companies have been taken over by an MBA-CEO caste devoted to Milton Friedman’s
devastating cult of the quarterly stock-price statement.

Today, companies
borrow in order to finance stock buybacks, market-cornering mergers and other tricks
that our ancestors (again, in the Greatest Generation or “GGs”) wisely
outlawed. Tricks that GOP deregulatory "reforms" restored to the armory of cheaters. Tricks that enable the CEO caste to inflate stock prices and meet
their golden incentive parachutes, with the added plum of pumping rewards for
their Wall Street pals who arrange the debt. Every parasitic act of “arbitrage”
is justified with semantically-empty incantations like “correct price
determination” – mumbo-jumbo spells that bear absolutely zero correlation with
reality.

No wonder each
added dose of debt is ineffective at actually growing long-term company value!
What’s so hard to understand? Why are Mauldin and Hunt puzzled?

Oh, yeah. They
are honest and sincere men, at last able to perceive symptoms. But alas, they
are also far too stubborn to acknowledge the root disease -- a conspiratorial
cabal of would-be feudal lords. Loyal to a fault... (well, these plutocratic
connivers are their friends)… John and other residually-sapient conservatives
choose denial over admitting that Adam Smith had it right, all along.

Instead, Mauldin
focuses again and again on his chosen Bête
Noir … the Federal Reserve, even
though the Fed has almost insignificant power over any of the things we’ve
discussed here.It’s Congress –
Republican for all but two of the last 23 years – who sent U.S. fiscal health
plummeting, from black ink to red that’s deeper than an M Class dwarf star. Congress
did this while devastating every protection against monopoly/duopoly or
financial conspiracy.

== Misunderstanding your own icons and
heroes ==

Consider that
Friedrich Hayek – often touted as the “opposite to Keynes” – actually agreed
with John Maynard Keynes about many things, like the need for a very wide
distribution of economic decision-makers. In an ideal market, this would be all
consumers, empowered with all information. (There goes Brin’s broken record,
repeating “transparency!” over and over.) Though yes, a 21st Century
Keynsian will call for a government role in (1) counter-cyclical stimulation and
(2) inclusion of externalities, like the health of our children’s children and
their planet. (Note the spectacular success of the greatest modern Keynsian politician, California's Jerry Brown.)

Hayek complained
that 500,000 dispersed and closely watched civil servants could never
substitute for the distributed wisdom of an unleashed marketplace of billions.
Hm. Well, that’s arguable. But so?

What does the
right offer up, as its alternative? A far, far smaller, incestuous cabal of a
few hundred secretly-colluding golf buddies in a circle-jerking CEO caste? That’s gonna allocate according to widely-distributed
market wisdom?

Hayek spins in
his grave.

This selfsame
CEO-caste went on a drunken debt spree that blatantly served the cabal and not
their companies, nor the economy or civilization.

Blaming the
Federal Reserve for that is like condemning the owners of a liquor store for
all the drunk drivers crushing pedestrians. Sure, the low price of booze might
have contributed, but it’s not the primal cause.Oh. And yes, it’s been Congress that keeps
funneling wealth from the middle class into gaping, oligarchic maws.

== Some of these guys almost get it ==

How I wish I
could share John Mauldin’s newsletter with you! It’s smart! I mean it. I always
learn a lot, the charts are excellent. Moreover, I get self-pats on my own
back, for assiduously reading the smartest commentators that I can find, from
every side. Also, John’s a cool dude and way fun. I read every word and its
maybe 70% real-smart stuff!

(For contrast,
see the super-smart liberal “Evonomics” site; the place where Adam Smith is
most-discussed and would be most at-home.)

Moreover, John
does honestly acknowledge – forced by the blatantly obvious - that income and wealth disparities are
problematic and rising, while money velocity plummets.

Only then he
goes to the newest catechism of the rationalizing right… arm-waving that technology is at fault.

Yes, okay,
automation has a depressing effect on middle class wages. So? Then it is time
for a conversation about the social contract again. Like how to keep the middle
class “bourgeois” – by keeping them vested in shared ownership of the means –
as well as output – of production. It’s what the Greatest Generation did, while
troglodytes accused them of “communism.” The most-entrepreneurial generation in
history, they were far from commies.

== Some in-yer-face time ==

Okay, it’s that
time again; so let me talk again directly to the confederate/feudal elites aiming to restore inherited hierarchies of old. This is no longer about Mauldin, but the would-be overlords standing right in front of him, in his blind spot.

Dear oligarch-traitors. Let me avow that
human nature and history seem to be on your side. Our experiment in
flat-fair-open systems always had the odds stacked against it. Hence, you
feudalists will probably get your wish. Briefly. The middle class will very
likely fall into proletarian poverty while you rake it all in.

Your evident
plan is to leverage new technologies to entrench oligarchic rule, right? I
depict something like it in EXISTENCE, though done by far smarter zillionaires
than you.

Only – was it really part of the plan to
wage open war on every single fact-using profession? Now including not just science and
journalism and law, but the FBI,intelligence agencies and the military
officer corps?And all the folks who
are innovating in genetics and artificial intelligence, too? Really? Are you that confident?

Or else, perhaps
you are like so many past lords -- so lulled by sycophants that you cannot hear
Karl Marx chuckling, as he rises from his mere-nap. (Copies of his works are flying off the shelves, faster than any time since the 1970s.) If so, you may get much
more than you bargained for. More revolution than any sane person would want.

Adam Smith
wasn’t the only one to seek a way out of this dilemma. Nor were the U.S.
Founders. Will Durant – one of the greatest historians – said this, in his book, "The Lessons of History":

“In progressive societies the concentration (of
wealth) may reach a point where the strength of number in the many poor rivals
the strength of ability in the few rich; then the unstable equilibrium
generates a critical situation, which history has diversely met by legislation
redistributing wealth or by revolution distributing poverty.”

The recent “great” time for
America was built by moderate, if somewhat leveling, legislation. The Greatest
Generation chose a Rooseveltean alternative to violent revolution. And it
worked -- inarguably, spectacularly -- till cheating once more gained the upper
hand.

Me? I stand with
the Founders. With Adam Smith and a flat-fair-open market society filled with
opportunity for all and grand, cheat-advantages for none. A relatively-flat
society that still has loads of incentives. One wherein true competition among
healthy-confident equals can thrive, pouring a positive-sum cornucopia for everyone.

And now, yes,
“equals” must include all previously-squelched sources of talent – genders,
races and the raised-up/blameless children of the poor.

You
confederates, you are the traitors to
that flat-fair-open-accountable Better Capitalism. The form that stood up to Marx and quelled him to sleep. The only kind of market system that can withstand the coming wind, when he awakens.

I stand with the
Greatest Generation… and greater ones to come.I stand with the moderate, scientific, flat-fair revolution that accepts
facts and complexity and denies simplistic incantations. Moreover, that moderate/calm/eclectic
kind of revolutionary numbers in the tens… hundreds of millions. We include
nearly all of the most-skilled, and our growing cadre hears the alarum.

110 comments:

Mr Brin--thanks for another brilliant essay; you're one of the relatively few people who make me feel hopeful about now. It's an odd irony in a way, since SF is full of, in fact, small conspiratorial elites who secretly bend things the right way...from the Howard Families, to the Second Foundation, to the True Slans, to the Bene Gesserit, to the conspiratorial elites of *The Stars My Destination*. If something relatively simple could be used to set off an H-Bomb under the elites--as in *Stars*--and it had the overwhelming effect Gully Foyle produced...would we do it? Did he make the right choice? I've always wondered...and is this the same thing as your "casting light on the elites"...? I get the feeling that we're very much on the verge of some basic changes, for better or worse...

And even then, they're not what they seem. Of course velocity is high when you have the largest generation ever boomed out going on the market, buying houses, working (and more women working than ever before to help pay for those mortgages), and entirely new processes to create those mortgages...but too high?

It's possible Volcker put a stop to it. More likely, demographic transitions simply played out: mortgages settled, families started, that generation settled into paying down high interest debt as best they could. Neither Volcker, Carter, nor Reagan deserve all that much credit (and indeed, as wages kept falling, the latter played a role in helping certain players who shifted the benefits away from most boomers).

As for velocity, most California investment goes into homes - as always - which are now playing an odd role as a 'store of value' (like gold, only easier to profit from). Even as we have a new generation looking to move in, million dollar investment homes are laughably out of reach for them (not the case for most homes in 1980). The incredible disconnect means money velocity slows immensely: there is no fact pattern by which a college grad can afford a home in most places where there are jobs.

So: homes for retirees converting nest eggs get built. Homes for investors hoarding assets get built. The young remain homeless - living in their parent's houses, trying to simply raise enough from gigs to pay off college loans, or find a career while boomers who wanted to retire linger on indefinitely (unable to afford a true retirement).

The Fed sets a policy that might influence a handful of huge players - but every incentive keeps them playing the same game with one another, leaving out the young who just cannot find a seat at the table. They are the drivers of money velocity: the risks they take, and now the prospects they face.

Dave Martin: why not use BONDS instead of bombs? Specifically, housing bonds. The elites play their games with one another, getting richer at each iteration. There just isn't any game to play that might actually broaden the base of benefiaries.

The greatness of the 'Greatest' generation lurks entirely in the blend of starry-eyed hope, stubborn pragmatism, and work. They built freeways, bridges, etc. because a 30-min commute was intolerable: folks with families to raise are too busy to live lives driving.

But now, the housing strategies work in reverse, the freeways need renewal - they don't drive em as much, and they remember the routes they once drove as a 'bit of a sacrifice' - and do not recognize the 2-hour commute others bear, the toll that takes. They had debts that they worked hard to pay off, and do not recognize the debts needed simply to join grew much greater than what they bore.

We have a president determined to go back to the Moon. That's a fine bit of touristic nostalgia, but we have more challenges before us, better dreams to dream, better communities to build...

If the Greatest Generation remembers what made them great, before the last of them are gone, I would expect their voting habits to change...and hope money velocity would pick up too.

I would like to thank you for this probing and most thoughtful discursus on the current economic system, the direction in which it is heading, and, if you will pardon my pun, the velocity with which it is headed in that direction. I am in agreement with you as regards most of the points which you raise.

That said, I would like to offer a sole caveat to your main thesis, one offered by Napoleon Buonaparte: "Never ascribe to malice what can be adequately explained by incompetence." I think it obvious that our would-be oligarchs are the beneficiaries of the system that they are creating; it is not so obvious that they are intentionally creating it, but rather, they are taking the steps which benefit themselves, and may be unaware of the consequences of their actions.

In that, our oligarchs-in-training may be not unlike the Bene Gesserit definition of an animal: a creature that will continue feeding, even to the destruction of the eco-system by which it is fed.

And THAT said, I think that there are other, additional, factors, which are contributing to this brave new world of oligarchs:

1) the degradation of our present compulsory primary system of public education, in which the primary skills of literacy and numeracy are no longer being taught, or taught as well as they are in many other nations;

2) the drastic increase in price of secondary and graduate education, which, taken together with the decrease in actual knowledge and skills taught, means that the formerly middle and lower classes are saddled with debt, all to pay for an 'education' which is in fact no such thing;

3) the rise of elite schools for the oligarchs, in which actual skills and professional knowledge are taught, and which only the oligarchs can afford;

4) the reservation of professional skills and knowledge (such as law, business, and finance, or, for that matter, STEM subjects) to professional schools which only the oligarchs can afford; and

5) the development of new manufacturing technologies and advanced expert systems (or, if you prefer, 'artificial intelligence') which will make obsolete many lower and middle class jobs, and which technologies can be wielded by those with the skills, knowledge, and education that only oligarchs can afford.

All that, taken together, make likely a highly stratified world of a ruling 1 percent, run by a moderately successful 14 or so percent of meritocrats, leaving the remaining 85 percent of the population to subsist as supernumerary proles.

Maybe we could get Haviland Tuf to genetically engineer some “Manna from Heaven” that only feudalists crave and that build up the subgenual anterior cingulate cortex so they can see the big picture of the whole races challenges and also learn the Nash’s Equilibrium and apply its recommendations.

Kind of apropos old Rush song!https://www.youtube.com/watch?v=ekoxIb85rww

DavidM… Sf has always had a wing that leans in to the romanticism of demigods. AE Van Vogt went there every time… as does Orson Scott Card, who brilliantly used a trick to make readers feel his godling was a passionately sweet underdog and deserved all the power in the universe. And to hell with all egalitarian institutions!

BB - sorry, but “"Never ascribe to malice what can be adequately explained by incompetence” collapses when you invoke Goldfinger’s Rule. When every single action benefits one party, you would be a fool not to consider “enemy action.”

This post links to the previous Medievalism/Romanticism/Feudalism discussion - because Romanticism is one of the elites main weapons in getting the Turkeys to vote for Christmas.

I agree with you in regards to that bolded bit...but Romanticism (in some sense) is really a necessary weapon to get any group of people to be inspired to work together for a common cause--or against a difficult enemy, and potentially sacrifice their lives. It's not just a tool of the oligarchs.

Every movement has its mythos that works on the emotions and non-rational pathways in the brains of its followers. As donzelion pointed out in the last thread, our host has his own streak of the Romantic and using imagery such as "A continuation of the American Civil War, blue kepis etc is part and parcel of that. And I like that imagery, BTW.

Dr Brin said:

Do not let so-called “tea party” confederate lackeys divert you. The U.S. Revolution was against a King and Parliament and royal cronies who commanded all American commerce to pass through their ports and docks and stores, who demanded that consumer goods like tea be sold through monopolies and even paper be stamped to ensure it came from a royal pal. Try actually reading the Declaration of Independence. “Taxation without representation” was about how an oligarchy controlled Parliament through jiggered districts and cheating, and used that power to funnel wealth upward.

All true of course, but, that is hardly the motivation necessary for actual soldiers to potentially sacrifice their lives and futures and those of their family in a war against a major world power. The Enlightenment words give justification for war, the Romantic arguments and mythos gives motivation to individuals.

The American Revolution has been referred to as "The Presbyterian Rebellion." That aspect of the war is not often discussed in high school classes here, but descendants of the Scottish Covenanters played a major role in the war and the Romanticized accounts of previous conflicts in the 17th century provided the material for a mythos strong enough to compel the sacrifices of many of the soldiers of the time. I'm sure there were other emotional appeals and propaganda that compelled others without that heritage. By the way, Walter Scott's historical fiction, Old Mortality, brings the conflict of the Covenanters with the Royalists to life, though his contemporary, James Hogg (who was from a very different class than the titled Scott, 1st Lord of Beucclach) felt the novel wasn't fair to the Covenanters. Looking back at that conflict, I suspect I might would side with the Royalists as opposed to the fundamentalist Covenanters, but the idea of free expression of religion is certainly a powerful one and influenced our constitution over a century later.

Bernard: Napoleon was often an insightful commentator - but these days, even if we have a vast array of incompetent feudal owners, they've learned to hire henchmen from systems that are themselves competitive enough to weed out much incompetence (as you say, meritocrats, mainly).

I see no indication of Bene Gesserit breeding programs at work among today's oligarchs. More likely, there's a beauty pageant breeding program underway - the grandchildren of Queen Elizabeth are significantly more comely than the children of generations ago (but then again, I suppose each generation of royals were regarded as 'comely' in their own time). In and Muslim Hindu cultures, where arranged marriages are still quite common, the beauty and brains of eligible bachelorettes is often a secondary consideration to property holdings (for Muslims capable of having multiple wives, the 2nd and 3rd will tend to be more beautiful, the 4th, younger - and probably beautiful, and likely serving more as a nurse). Of the factors you cite:

"3) the rise of elite schools for the oligarchs, in which actual skills and professional knowledge are taught, and which only the oligarchs can afford;"

I actually went to such a school; the structure favored henchmen, not oligarchs. The debt load is more important; either you are an oligarch's scion on entry, or strive to work for one upon graduation. No other realistic way will present itself to pay off that debt quickly for most graduates (and that's even the ones with debt forgiveness programs - my school had the largest endowment of them all, and was parsimonious in the extreme).

The factors I see making the stratified world relate more to who owns the largest debts, who trades and securitizes them, and how the benefits get distributed. That's the 50% of global wealth held by the top of the 1%. For all the rest, things are much more complex.

Dr. Brin: "Sf has always had a wing that leans in to the romanticism..."

Indeed, and we ought to start with Shelley, herself fairly closely linked to the high masters of romanticism, no?

But it is intriguing: the early romantics were frequently 'egalitarian' - the purpose of fixating upon the gods and goddesses tended to be in pursuit of broadening the scope of deity from the confines of Greco-Roman tradition to include Irish, Native American, and other folklore. Card presented Enders as a demigod - then started deconstructing that only a few chapters later, then spent a whole book (and a better book) doing the same - suggesting that at the time, he regarded the only real 'godly' skill of his creation to be his gifts as a storyteller (rather meta for sf). Seems to me it's the schlock fantasy serialized monsters (which once I loved as a man-boy) that are locked into the 'chosen one' theme.

Von Vogt? Took a glance at bookstores, but L Ron Hubbard loomed larger, enjoyed it as a 12-year old (back when I still thought Ewoks were way cool), then stumbled across some guy writing about talking dolphins and haiku...and became embarrassed by my previous choices.

Please look up"loyalty shares" by patrick Bolton and Fredrique Samama. It is a way to get public company governance focused on those five and 10-year games of substance again. And prevent the quarterly casino games from dominating. It's legal, it's been done, and it doesn't require an act of Congress. Just Executives who want to make more money...in slightly longer time frame.We know how to manage companies for the long term. When they do so, they can't afford to ignore climate change or other problems with sustainability that will cause bankruptcy. Private companies are pretty well run. It turns out there are ways to manage public companies rationally as well. But you have to get the financial incentives aligned between the shareholders and the engineers and the employees and the executives and the customers. Not so hard. Solved problem in private companies. It's just a matter of finding the right defense against the casino players on Wall Street.

Flannery makes a charming analogy between the pachyderms of the mammoth steppes and bank managers who facilitate the velocity of money. Then some neo-liths wiped them out and all the grassy money got locked away in the permafrost.

The RW politicians and their followers have become totally enamoured with the sounds of their own pronouncements. As Silberman has noted, accurate reporting no longer matters nearly as much as 'sticking it to the Libs'. (if this righteous wrath be a form of self-administered endorphin abuse, maybe all it takes to fix is regular hugs?)

The GIni Coefficient in France in the late 18th century at the start of the French Revolution was 59.

http://www.piketty.pse.ens.fr/files/MorrissonSnyder2000.pdfOnly 10 points higher than it is now in America.

At our current rate of growing inequality we Americans should be storming the Bastille in about 30 years, by the mid-2040s.

The Tea Party revolt against the Republican elite was just the first rumblings. That they are being led by Trump, a wealthy businessman turned demagogue, isn’t so odd when you consider that the French demagogue Robespierre was also a wealthy lawyer/businessman.

The 1% know this and are afraid.

Which is why they are buying up fortified homes and doomsday bunkers (at a time when mere violent street crime has fallen precipitously) like there was no tomorrow.

Thanks to David, I subscribed to Mauldin's Over My Shoulder newsletter. It's a real bargain at about $5 a month (though that deal is probably no longer available). Mauldin and many others are starting to become more confident in their predictions of a recession in the spring 2020 time frame (though with a large standard deviation of about 6 months). This is good news for the Democrats since "It's [always] the economy, stupid." If that comes to pass, Trump will be a one term failed president. I checked with some economics professors here at the university (where I teach in CS) and two of them believe that there will be no way out for the US but to begin the climate change era through a massive investment in infrastructure (by borrowing, hopefully, at very low interest rates). Since the US demographics imply a sharp decrease in the growth of the working age population (until the mid 2020s and this is due to baby boomer retirement), there will be no alternative but to raise taxes on the wealthy and increase immigration (which means we will have to endure a "civil war" to get there). However, this should be good news for right wing and left wing populists alike since the US will face a no way out situation if this scenario comes to pass.

Rush is my all time favorite band. I've seen them 8 or 9 times live and recently saw them (Lee and Lifeson) induct Yes into the Rock Hall of Fame. Y'all probably have no idea how amazing it was to listen to Rush in the early '80s as an immigrant to the US (from India) and use Peart's lyrics to shed ethnocentrism. And Rush led to Yes, King Crimson and Genesis (and the late '60s to '75 period which IMHO had the best music of the past 50 years).

"The world weighs on my shouldersBut what am I to do?You sometimes drive me crazyBut I worry about youI know it makes no differenceTo what you're going throughBut I see the tip of the icebergAnd I worry about you" - Distant Early Warning, Grace Under Pressure, Rush, 1984

Bernard Brandt:3) the rise of elite schools for the oligarchs, in which actual skills and professional knowledge are taught, and which only the oligarchs can afford;

That's the way actual universities used to be. Now that the unwashed masses all attend college, the elites have to have their own something-else to distinguish them. Like the star-bellied Sneetches who remove their stars to distinguish themselves after the plain-bellied Sneetches added stars. Or more to the point (as Dr Brin has mentioned many times), the wealthy and powerful no longer fly first class on the same airplanes you and I fly coach on--they have their own separate planes and even their own separate airports.

donzelion:L Ron Hubbard loomed larger, enjoyed it as a 12-year old (back when I still thought Ewoks were way cool), then stumbled across some guy writing about talking dolphins and haiku...and became embarrassed by my previous choices.

Well, they haven't (quite) reached the point of the Priests of Syrinx... yet. (And who knows - it might be fun to have some of the Outer Worlds give us a few small moons as tribute!)

NoOne, oddly, King Crimson, Yes, and the original lineup of Rush all came together in 1968. Equally oddly, Rush formed in the fall of 1968, yet were heavily influenced by the work of Led Zeppelin, which was only a few months older. Something in the air, I guess - possibly something that's only recently been legalized in parts of the US... :-)

It is a given that the feudal oligarchy 'seeks rent' rather than investing in expanded productive capacity -- it was this common strategy of rent seeking in a restricted productivity (and/or scarcity) environment which created the feudal oligarchy in the first place -- but David would have you believe that it is ONLY the feudal oligarchy that 'seeks rent' without investing in productive capacity when this is a nearly universal wealth accumulation strategy practiced by damn near everyone.

Those who wish to accumulate wealth start by SAVING more assets than they expend. This is called 'hoarding'. Hoarding has at least three macroeconomic effects. First, hoarding preserves the saved assets for future use. This is why we preserve & store seasonal grains, fruits and vegetables when they are plentiful. We do it to anticipate & prevent future hardship and famine.

Second, hoarding creates an artificial SCARCITY of assets which artificially magnifies asset value via Supply & Demand dynamics wherein scarce items have more economic value than plentiful items. Besides hoarding, other tactics that create asset scarcity include production restrictions as anything that makes an asset more plentiful & common will reduce the economic value of the saved or hoarded asset.

And, third, asset scarcity facilitates rent-seeking arrangements that allow the hoarded asset to generate additional income without depleting itself, assuming the hoarded asset is a durable good like a house, knowledge or proprietary skills that can be used over & over by multiple renters, while increased production capacity lessens the economic value (rather than the utility value) of the hoarded asset.

Aside from the feudal oligarchy, notorious rent seekers include tradesman, the government, property owners, pensioners, professional societies, labour unions, welfare recipients & anyone who benefits from anticompetitive legislation while receiving open-ended material recompense in return for the temporary and revokable use of their durable goods & services.

Finally, it is important to realise that 'wealth inequality' serves the same purpose of hoarding, mostly because 'wealth inequality' is simply 'hoarded assets' by another name, which is why Venezuela-style wealth redistribution schemes tend to end in disaster. Once hoarded wealth is redistributed in the name of 'equality', the redistributed wealth floods the market, leading to the end of scarcity. it's relative oversupply & its wide-scale DEVALUATION as in the case of the 2009 housing bubble.

Those progressives who conclude that wealth inequality is 'bad' are guilty of logical fallacy, most specifically the confusion of 'utility value' for 'economic value', the difference being that utility value refers to the objective value of a certain resource (ie. a loaf of bread to a hungry man) whereas economic value refers to the market value of said item in response to supply & demand dynamics.

The key distinction between utility value & economic value is this: One or two bread loaves may have definite utility value to a hungry man but 100 bread loaves have exactly ZERO utility value to the same man, whereas 100 bread loaves have definite economic value to fifty or more men but less than two or more than 20 thousand bread loaves have exactly ZERO economic value to the same fifty.

The greatest generation had a government that it/they could affect. But now we have globalization, where contracts between corporations supercede governments. And profit is god, not the environment, people, or the future. How can we change this?

"companies borrow in order to finance stock buybacks, market-cornering mergers and other tricks"

So you buy a company (with borrowed money), and then have the company borrow a crapload of money. You use the money to pay off your debt and pay yourself a big "special dividend" taxed at a low rate. How to pay back the company's debt is not your problem, it's the company managers problem, which means staff downsizing, and R&D and new product development go out the window. Also, the company's profit stream is now converted into a stream of interest payments, which are also taxed at a lower rate. If company management cuts enough cost to become profitable, you do an IPO; if not, you toss the keys to the creditors and go on to the next acquisition.

One equation for velocity of money is V = GDP / money supply. Along with the central banks of Europe (ECB), Japan (BoJ), and China (PBoC), the US Fed has dumped some $13Trillion (!!) of new money since the financial crisis hit in 2008. Despite this unprecedented period of money-printing, during this time global GDP grew an average of about 2.4%, significantly less than the 3.5-4.0% in the preceding 30 years. So, it's not surprising that Velocity is so pathetic.

More importantly, those close to the newly-created money (banks and their brokerages/investment branches) have benefited the most from it. Banks sold junk debt (Mortgage-backed securities, junk bonds, etc) to the central banks and received new reserves for it. When they weren't allowed to directly invest those reserves (due to changes in required ratios), they used them as collateral to borrow money they could invest. Because traditionally safe bonds were returning next to 0%, banks threw that money at the stock market.

The Bank of Japan now owns about half of all Govt of Japan bonds and 75% of all ETFs (equity funds) in the country. There is almost no private market for either of these and the US has been perilously close to going down the same road for some time (though the Fed is not supposed to be able to buy equities, the money finds it way into the stock market through slightly more circuitous routes).

It is no surprise that wealth and income inequality is at an all-time high in the US as a result. And there is no obvious improvement (despite MAGA) on the horizon. Simple-minded globalism brought cheap manufactured goods to the US retailer (at the price of manufacturing jobs). Simple-minded nationalism threatens to hurt the poor consumer without doing much (short-term) for good-paying jobs. Indeed, it seems likely the rich will only use their bolstered funds to automate production in order to avoid having to hire troublesome humans.

I'm not convinced that the solution is some magical unwinding of the economic clock to a "golden age" of America. I think the world has moved beyond this. At its essence, capitalism (and the fiat money system that underlies it) critically rely on "growth." Historically, the best growth comes from an increasing population. But environmental concerns of the 60s and 70s (and more recently, climate change) put a stop to that in much of the developed world. We tried to substitute growth in inflation for actual economic growth (the debt that fueled previous growth becomes less expensive to repay), but that didn't work indefinitely. Now, many economists and politicians are openly questioning whether there really are any limits to the amount of debt a country can incur. Japan is leading the way again with over 250% debt-to-gdp (higher even that Greece).

Traditional economists are freaked out over numbers like that (anything over 90% is worrisome and should be temporary), but when you add in future pension and medicare obligations, the debt soars. In the US, the current national debt is already over $20T, but Social Security and Medicare obligations push that number up by as much as $210T over the next 20 years. Soon, pensioners will join the ranks of the underemployed in the lower ranks of income and wealth.

There may be some way that the financial system can escape disaster under its current configuration, but I don't see it. In my sci-fi novels (Deplosion series), I advocate for returning to growth by colonizing asteroids and trying to move toward a post-scarcity economy. But things will have to drastically change course in order to accomplish that. And, as Dr. Brin points out, at a time when America's education system needs to produce more well-trained, innovative individuals than ever before, the system seems intent on dumbing itself down at an incredible rate. Perhaps, countries like China and India will be better positioned to lead the way into the future.

Huh, this stuff's hilarious, even the trollery here is a pleasant excursion, must come back when there's more time. Have to take this blogpost as both tongue-in-cheek and pie-in-the-sky, let's just call it tongue-in-pie, that's pleasant too.

Of course, the gimmick to spur wealth churning rather than knotting is a very simple set of a few fulcra.

1. Check primogeniture, progressively tax estates over $1m.

2. Separate banking from insurance.

3. Reduce fees and relax regulations on smaller businesses.

But don't think you'll bring World Peace with equitable wealth and wider opportunity. The broader sweep of history, both recorded and scientifically deduced, tells us that life needs to struggle in order to advance. In fact, the best advances are not planned, but are a byproduct of the need to struggle. Time and again, this urge is subsumed into aggression. But also sometimes, the thing to struggle against is aggression itself. Same coin. Same pendulum.

Could be, that we need low-sci people to hold power now and then. Any knot of dogma can not help but collect a mass around itself, which eventually calcifies and cracks. They all do, in the end, it just generally goes faster with ones which ignore the most logic. If you want to plan for the future, find the crack. If you want world peace, find an outlet for natural human struggle, one which doesn't require much scientific knowhow.

Climate concerns might do it, if things go really haywire, but we'd be better off giving our ambitious and aggressive people something bigger to chew on. Maybe make the whole universe our enemy. Not a stretch, we are in a literal cosmic shooting gallery here, the space pebbles fly around at incredible speeds. Even Hawking said we got to get off this rock. You want world peace? Let current insularism reach a brittle point, then into the cracks, you inject the idea that the universe is out to get us. Which it is.

There was that meteor thing in Cherba-something Russia a few years back. How is any nefarious violent religic cabal more frightening than a big rock hitting a big ocean and sweeping a billion folks away? Mostly people with beachfront property, naturally.

When the strongest strugglers think their offspring can best survive if they plant colonies on the Moon and Mars, then there's less left to fight about on Earth. Two problems solved at once, love it when that happens.

The job transfer was much much worse that it should have been - Not for economic reasons but for the short termism and individual profiteering

90% of the time transfering your manufacturing operation overseas does NOT actually reduce costs - it DOES reduce labour costs but the additional other costs normally outweigh that BUT bloody Silly MBA's are not taught to work on total costs - Just Labour costs!

The other thing that a move abroad does give is a chance for Vice Presidents to make out like bandits with what amounts to simple bribery

I believe that a lot of that could be massively reduced if the USA (and NZ) went the Norwegian way with everybodies tax return becoming a public document

"Could be, that we need low-sci people to hold power now and then."When has it been otherwise? Aside from Merkel, one struggles to find 'high-sci' people holding power...ever. Quite a few 'sci-friendly' users from engineering fields (Thatcher, Carter). But only the smallest handful (but Lincoln is the only president to have a patent, so...)

"Maybe make the whole universe our enemy."Sort of depends: is the existence of an enemy necessary for struggle to propel a work toward eminence? I do not see that. Seems more possible that thinking in terms of 'friends/enemies' limits thought itself - it's a potentially useful skill in many settings, but is not the only skill with uses, and may be counterproductive to other sorts of skills.

I'm not disagreeing that it wouldn't occasionally be useful to re-route aggression towards 'fighting space' - so much as proposing that aggression itself is only one of numerous potential drivers, and not necessarily the most effective for a fair number of applications we care about. Or again, following an aphorism occasionally credited to Lincoln, "Do I not destroy my enemy when I make him my friend?" (an aphorism whose provenance I cannot confirm, btw, but still like)

This guy takes liberals to task for inspiring a backlash that brings someone like Donald Trump to office and may get him re-elected. He's saying things that have been mentioned here many times, and though I don't like hearing what he's saying, I'm not discounting it.

I do want to focus on the part I bolded below, though. Again, why the double-standard? Why are Democrats always told it's not sufficient to be against something--you have to be for something, and yet this below is considered good advice? :

https://www.nytimes.com/2018/05/12/opinion/sunday/liberals-youre-not-as-smart-as-you-think-you-are.htmlI know many liberals, and two of them really are my best friends. Liberals make good movies and television shows. Their idealism has been an inspiration for me and many others. Many liberals are very smart. But they are not as smart, or as persuasive, as they think.

And a backlash against liberals — a backlash that most liberals don’t seem to realize they’re causing — is going to get President Trump re-elected.

People often vote against things instead of voting for them: against ideas, candidates and parties. Democrats, like Republicans, appreciate this whenever they portray their opponents as negatively as possible. But members of political tribes seem to have trouble recognizing that they, too, can push people away and energize them to vote for the other side. Nowhere is this more on display today than in liberal control of the commanding heights of American culture....

Jeffress! Good Lord - are the EU countries north of the Alps and west of the old Iron Curtain, plus South Korea, Taiwan, and (since a couple of weeks ago) South Africa, the only countries on Earth that don't need regime change? The US and Israel both certainly do; I really hope the Israeli people throw off the Netanyahu/West Bank Settler thugocracy before the whole region turns into a set of smoking ruins. And in the meantime, we have the Enabler In Chief right here.

Robert:Jeffress! Good Lord - are the EU countries north of the Alps and west of the old Iron Curtain, plus South Korea, Taiwan, and (since a couple of weeks ago) South Africa, the only countries on Earth that don't need regime change?

Absolutely right about Canada. My mistake. Off the cuff, I can add the southern end of South America, plus Costa Rica (which just avoided Trumping itself). There are also some genuine democracies in Africa now, too. And there's New Zealand and Australia (Australia has too much regime change). And others I'm sure. But it hurts to see the US, Britain, and Israel the way they are now.

LarryHart: "But members of political tribes seem to have trouble recognizing that they, too, can push people away and energize them to vote for the other side."

The problem with any such claim is it overlooks the propaganda at work, and what tribalism means: once tribalism is injected, any Democrat will 'push people and energize them to vote for the other side' simply by breathing in an unacceptably partisan manner.

From the last threadDave said“Hey Occam. Neener. Show me the calculations. Actually put them down as a rational argument backed up by estimates of my carbon footprint, vs the good I have done with books like EARTH and speeches and debates that have left denialists shattered and policies changed.

REFUTE my argument that using an advance technological society to move forward to post-carbon levels will work better than renunciation, a stupid prescription you share with all the old feudalisms.

Again, I do more for a better world in any one day than you do, in a year. And this time (since you ignored it and yet decided yet again to provoke me with another scratch at my ankle) I’ll repeat it.”

OK Dave, What value is a book like Earth? How did it reduce global warming?Was it worth killing all those trees? Did it convince people who were not environmentalist to become environmentalists? What kind of environmentalist and how many? – cultural environmentalist who say the “right thing” then go out buy a new SUV and fly all around the world or the practicing environmentalist who actually change their behavior to reduce their carbon foot print? How much credit should you get for their decisions and actions?

I would estimate that the environmental value of a book like Earth to be slightly positive, kind of like an episode of Captain Planet. As for speeches and debates, I do not see all the denialist shattered or their policies changed.

As far as policies changed – what policies? What was changed? How important were you in enacting that change?

50% of human created CO2 comes from the 10% of the population that has an income above 35,000$ per year.

“again, I do more for a better world in any one day than you do, in a year. And this time (since you ignored it and yet decided yet again to provoke me with another scratch at my ankle) I’ll repeat it.”

You know it is too bad that your super inflated ego doesn’t provide aerodynamic lift (like a hot air balloon). If it did you could probably lift a 747 to about 5 miles high and save a huge amount of fuel.

The first wave of automation was the Industrial Revolution, which resulted in both the robber barons and the wave of industrialization that was larger than the persons displaced from their jobs. It also then resulted in the anti-trust legislation of the earlier 20th century.

The next wave was office process automation: the telephone and other early electronics. This wave was less sudden, starting before WWII and continuing after. It's effects were much more spread out over time and thus didn't incite quite the responses of the earlier wave. And since it largely allowed for a larger economy, the total number of jobs did increase. Still, the commoditization of transportation and communication allowed the growth of the mega-corporation. Less political pushback there, but could arguably be seen as starting the counterculture, as well as The Man In The Gray Flannel Suit.

The current wave of automation has yet to play out fully. We have jobs getting cut as automation takes over. But we haven't quite yet seen the expansion of new business forms that require labor. And we must add into that how internet data plays into this wave, as it's not the same sort of wave that just displaces people from their occupations.

The next wave was office process automation: the telephone and other early electronics. ...

The current wave of automation has yet to play out fully...

That reminds me of the way Kurt Vonnegut laid out the premise for Player Piano back when the earth was still cooling in 1953. The premise of the novel was that automation had replaced all of the manufacturing process but the plant managers and engineers, who still had good jobs. Everyone else was either in the army or given make-work in the "reclamation and reclamation" corps colloquially referred to as the "Reeks and Wrecks".

In that book, it was explained that the original Industrial Revolution had devalued brute force labor, while the so-called "Second Industrial Revolution" devalued most work with the hands. While Vonnegut's dystopian novel took place in an unspecified future, he was really describing events which began in the WWII and post-war era itself.

In that vein, your "current wave" (or perhaps Third Industrial Revolution) is about devaluing brain work, or throwing those managers and engineers out of work as well.

Raito: "But we haven't quite yet seen the expansion of new business forms that require labor."

The American economy has moved so far toward 'services' that it may well reflect what to expect - particularly 'health-related services,' which are now about a quarter of the overall economy. Far from a world in which everyone is tossed into the military, I'd anticipate one in which everyone is tossed into 'health care' in some form - with the format evolving routinely to encompass new forms of 'caring.' Japanese experiments with 'caring robots' are intriguing, but about as convincing at this stage of the 21st century as the notion of replacing 19th century factory workers with AI would have been using 19th century steampunk bases.

The Japanese don't have much choice regarding their 'caring robots'. They won't have the people to care for their elderly AND fill the other jobs they need done. Demographic crunch.

In the US, we likely will have a choice and it won't be the first time we've done something like this. We used to need a gazillion secretaries. We used to need a bazillion truck drivers. Things change.

I don't think it is quite fair to call this the industrial revolution anymore, though. We aren't industrializing here in the US. We are 'servicizing' or something like that. We've been doing this for quite some time now.

I don't think this discussion really gets it. PLEASE people read "Between debt and the devil". You can create new money either via government spending OR via private borrowing, but there is no way to create money without somebody going in to debt. The problem with creating money via private borrowing is that it tends to inflate asset prices, especially land prices (often mistakenly called house prices - the house is just a big consumer durable). The problem with government debt in the hands of the central bank (i.e. money printing - the devil in the title of the book) is that it is inflationary (but that is not an issue in Japan). The problem with government debt in the hands of the domestic public is that it guarantees a flow of government to the already rich. The problem with debt in the hands of foreigners is that it guarantees future balance of payments problems. I tend to think that the idea that government debt was a bad thing as such was massively overdone, we would be better off with some more government debt if it means less private debt and lower land prices. (Avoiding foreigners holding lots of your government debt is another story - I really think we need international financial reform so that no domestic currency is a reserve currency.) Macro-economics is difficult, our instincts are often just wrong.

P.S. If you have a large government debt mostly in domestic hands, and an aging population, inheritance taxes seem like a good solution. Maybe somebody should tell Japan. It has the added benefit of encouraging the old and rich to spend more of it.

I'm a deficit hawk. I think we should run a deficit to maintain a debt level that economists believe will net benefit the nation/future generations. Any debt over that should be slowly reduced to the desired level through estate taxes in about a generation. I hate to think that new voters come of age with a lot of proportionate debt without much faith that the deficit spending in the past was done largely to net benefit them.

Alfred: "The Japanese don't have much choice regarding their 'caring robots'. They won't have the people to care for their elderly AND fill the other jobs they need done. Demographic crunch."

They (and we) have several choices: (1) change society to open doors to foreigners (maintaining a human touch, but from a non-native's hand),(2) change social-political conditions to arrange new mechanisms to extend/prolong working years (retirement at 60 used to be nearly mandatory in Japan...now employers are increasing to 65, and even older)(3) change psychological traits to embrace robot caregivers

The latter is the most extreme option - and an unlikely one absent some strong cultural support.

"In the US, we likely will have a choice and it won't be the first time we've done something like this. We used to need a gazillion secretaries. We used to need a bazillion truck drivers. Things change."

The nature of the change depends greatly on the quantum of value linked to 'human touch' being changed. John Henry drove a hammer; so does a steam-hammer: nobody really cares which is used, so long as the hammering is done. Word processors can quickly eliminate a typist pool, sure, but was there any value in the 'human touch' on typewriter keyboards, or was the value purely a function of fast, error free document transcription? Other than to the John Henry's and the typists, that value would be pretty negligible. Same probably applies to truck drivers - people don't care about the trucker him/herself, but about the presence of objects where they wanted them when they wanted them at the lowest price possible.

Things are quite different when we look at areas with a significant value based on human engagement: a couple generations have been raised with human caregivers displaced to some extent by television sets and entertainment gadgets...the outcome has not been completely satisfying.

reason - I don't think it's appropriate to see money creation as 'either' government debt OR private debt - in practice, both directly influence one another - and often, the best we can do is try to influence acceleration/deceleration at work.

"The problem with government debt in the hands of the domestic public is that it guarantees a flow of government to the already rich."

It really depends on structural factors: tax allocations, asset valuations and general access to assets, and many other related concerns. The problem isn't that 'government debt makes the poor poorer and the rich richer' - but that the rich have arbitrage capabilities the poor do not: they are quite likely to obtain a better risk/reward ratio than the poor even when looking at the 'same' pool of assets, because they can access entirely different pieces in the same asset/benefit scheme. Everyone fights for the right position in the waterfall - only a few are in the right position to get a sip of water, and the rest, merely get wet.

Politically Annoyed:I really wish the aristocracy would figure out that its in their best interest for a more prosperous everybody. It makes guillotines less necessary.

Other countries get it. Many years ago, radio host Thom Hartmann had a guest who was a wealthy German businessman, and he was defending their high taxes and robust social safety net. His justification was, "I don't want to be a rich man in a poor country."

"I really wish the aristocracy would figure out that its in their best interest for a more prosperous everybody. It makes guillotines less necessary."

Aristotle distinguished 'aristocrats' from 'oligarchs' largely by focusing on their relative ability to figure out the 'best interest of everybody' and pursue that rather than self-interest. He was also skeptical that this could be relied upon: the elites, in his view, would tend to be more oligarchic than aristocratic.

I've got a couple small items to essentially add on as illustrations of his thesis, but first a couple comments on the comments:

1st, though in not publishing order, but in homage to our host (responding to a comment - sheesh, don't get to this for a few days and it's sort of like wandering through fun house mirrors...) -David cites Goldfinger's bon mot. I think that Goldfinger's creator takes precedence; "Once is happenstance. Twice is coincidence. Three times is enemy action.”

David ws responding to BB, who also offered the bene Gesserit definition re animals. The bene Gesserit were an unlovely bunch to a given degree, seeing themselves as elevated from the common herd, so to speak (they weren't wrong, just a bit arrogant and self-serving). There is a much better analog to be found in objective biology/zoology. The too successful predator enjoys one or two great seasons, at most.

So many interesting things to give h/t from the other comments... so at random,

"Loyalty Shares" - see various references about "Shareholders vs Stakeholders," here's a starting point from MIT/Sloan https://sloanreview.mit.edu/article/the-shareholders-vs-stakeholders-debate/ Or, for real fun and a blast for the past the following link is to an Annenberg site that archived the PBS Roundtable "Ethics in America" which aired in the late '80s early '90s. The third show, Nov/1987, was about "Public Trust, Private Interest," and featured a number of luminaries who are mentioned in the promo ... also someone who begins speaking at the 35:50 mark (whole show is worth watching). A hint? A then little known congressman (former history professor) from the GA-06, on the verge of breaking into the big time --

http://www.learner.org/vod/vod_window.html?pid=193

Back to MV. One of least understood and unfairly maligned concepts in our economy is government transfer payments e.g welfare. The fact is that it has the highest velocity of just about all mechanisms. Not counting the minor portion that probably go into drug dealers hands and the like, the overwhelming majority is immediately put back into the economy at supermarkets, convenience stores, bodegas, rent etc. In discussing this, I eschew my favored bio/zoo/ecological analogs for the purely mechanical: think of it as lubricating oil for the engine.

Of course, the question inevitably continues to the Universal Basic Income (UBI) concept, but I'll leave that for the moment.

Just one more, re Hayek's mention in the good Dr.'s text. I professionally knew a CEO who I respected in may ways, while having some distinct differences in our working relationship. This CEO is/was a small "l" libertarian who was a devotee of Hayek, speaking of his allegiance at length in semi-public and closed forums. He also kept a copy of Mayer-Schonberger's, "Big Data: A Revolution That Will Transform How We Live, Work, and Think" in his briefcase and was prone to take it out and wave it whe he wished to make a point...

Of course he had been a litigator by training and practice before entering the corporate ranks, never having earned an MBA.

in a recent post, donzelion offered a qualifier "quantum of value linked to 'human touch' being changed." I think that also applies to the argument re Feudalism and Oligarchy in general. As in all such matters (even ecology) follow the trail to who profits.

There are exceptions: The Term Asset-Backed Securities Loan Facility (TALF) - read all about it in this most entertaining article in (of all places... actually, not too surprising), the Rolling Stone: https://tinyurl.com/y98marwn

With tinyurl you lose the title so to whet your appetite, the title is The Real Housewives of Wall Street

"Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?"

One last thing, every time I hear someone declaim about Balanced Budget amendments and the need for the gosh-danged gubmint to deal with the budget just like companies and Fred & Myrtle at their kitchen table, I have to ask one question: Do companies, let alone Fred & Myrtle print money that is recognized as legal tender?

The problems of Deficit & Democalypse that our societies face are geometric & arguably exponential, like the parable of the Rice-Grains-On-The-Chessboard and, for every effort, resource & drachma that we dedicate to the burgeoning fair-level-equal-open Welfare State, the less likely "Fighting Space" possibility becomes & the more likely that our Enlightenment Experiment will fizzle & fail after succumbing to the Democalypse.

Short of an infinite resource cornucopia full of unlimited food, power & labour, all of your proposed solutions to the global economic deficit & the coming Democalypse will fail save for the most 'inconceivable' (and therefore the most objectionable) one: A global culling of immense proportion.

And, so our indecisive societies will dither in the face of these apparently insoluble problems, terrified of direct action, preferring the sins of omission to those of commission, until these problems solve themselves by the foreseeable cataclysm.

That might have been me: my argument is that the Fed's powers are not as powerful as frequently claimed. The Fed has powerful tools - but at best, it may be able to set a course in the face of winds of demography: it cannot generate its own winds.

Thinking in pure demographics, we should have expected vast growth in monetary velocity in the late 70s/early 80s as boomers sought housing and new securitization of mortgages made it possible to meet their demand. We should also anticipate slowing velocity as boomers retire, and stop taking on new debts.

Millennials might offset this, BUT (1) they already transferred a vast chunk - perhaps more than a trillion dollars - to their elders in the form of college debt, (2) in view of that debt and the paucity of entry level jobs that pay enough to afford a house at current prices, a far smaller fraction of millennials can obtain a mortgage than was the case for the baby boomers, and (3) the increasing cost of health care means that assets held by parents, which previously could have been used to pay for college or new homes for younger people, are now hoarded against the likely costs elders confront.

"Do companies, let alone Fred & Myrtle print money that is recognized as legal tender?"In a manner of speaking, they 'print' more money than the Fed ever could - 'legal tender' itself is but the tiniest fraction of the money stream, and the power to print it less important than other powers wielded by the Fed.

As for this - "I think [the value of human touch] also applies to the argument re Feudalism and Oligarchy in general."Absolutely. Alfred likes to talk in terms of cultural shift (in the Renaissance, folks valued those peasants for a change) - but I see it in more economic terms. Under feudalism, the cost/benefit of each peasant was directly linked to the available jobs, with a relatively fixed number of hands needed for each farm plot or skilled position: lords weren't particularly concerned if a famine wiped out half their workers, so long as enough kept the fields in production. Under capitalism, 'labor' was 'transferable' - capable of fulfilling whatever functions capable conceived for them to fulfill - every person could potentially be worth FAR more than the currently available territory required.

Only if population and need have geometric and exponential conditions. The 'Rice-Grains-On-The-Chessboard' theory is a useful illustration of the power of doubling for children, but not a very useful illustration of real world conditions those children will ever confront.

"for every effort, resource & drachma that we dedicate to the burgeoning fair-level-equal-open Welfare State, the less likely "Fighting Space" possibility becomes & the more likely that our Enlightenment Experiment will fizzle & fail after succumbing to the Democalypse."

Absolutely correct IF we live in an inherently feudal world, where 'fighting space' is delineated sharply, and territory guarded fiercely by occupants who can never be displaced. Absolutely wrong in a liberal, capitalist world. In that sort of world, the key isn't to redistribute, but to ensure that the benefits are spread among those who contributed (including those who didn't obtain the best possible position before opting to contribute).

In this life, we can assume pain and suffering will occur, but need never assume cataclysm - and assuming an imminent cataclysm is precisely the thinking that ensures one will suffer the most.

Watch this space. Ever since Turnbull booted Abbott the LNP have been engaged in a Danse Macabre that, Annihilation style, closely mimics the Rudd/Gillard Government. Turnbull was supposedly a moderating influence but he acts like someone with a Drakh Keeper firmly attached: he's clearly in the thrall of the hard right. Meanwhile, Dutton's border force powers are expanding, and he's looking to be able to monitor domestic phone activity. Watch this guy. Last week's budget was a sick joke aimed at pleasing the fossil fuel lobby and other rich people. (actually, every LNP budget since Hockey has been a sick joke). Murdoch press and Cambridge Analytica aren't going to dig them out of this one.

Speaking of rich folk, just saw this tweet about two people in sole control of pension funds totalling a quarter of a trillion dollars. Not *quite* in the 'Trillie' range, but isn't it really a % of the wealth?

As to growth... any biologist and Malthusian will tell you about that. It turns out some economists are looking at alternative systems, eg Oxford's Kate Raworth suggests thinking in terms of donuts. (Would that make it complex exponential growth? ;-)

re your " it cannot generate its own winds." But that is the point, in no small way was the fed's creation as a separate institution to do what other nation/states Central Banks could do. Moreover, without direct control of the Mint, the Fed's job it to re-direct the economic winds.

Among times when it fails, is when it plays favorites for short term gains e.g the Merry Wall Street Wives.

The Fed may, through putting english on the ball (sh*t, another sports metaphor, but perhaps Professor Harold Hill will allow it given the capital P that rhymes with T...), may cause the creation of fresh currency.

And yes, you are correct that currency has become one of the lesser metrics of an economies efficiency, or even wealth itself - where instruments are accepted units of exchange, BUT, at the rubber meets the road level for the 99.9% group, currency is still essentially king in daily analysis - the caveat, of course, is in retirement plans that have become over-dependent on 401k's and such. Also, the residential factor of mortgages themselves becoming units of exchange...

I have just had to buy a new electronic copy of Beyond This Horizon as I could not find my old paperback One of the most important parts IMHO was right at the start A simple explanation that The money supply should increase as the economy does Which if you think of money in the economy as similar in function to blood in a body makes perfect sense

The other side of this is that the increase in money supply is normally added directly to the basic living stipend (We could simply mail a cheque to all citizen

Directly from the book

"We call the system “finance” and the symbols “money” The symbolic structure should bear a one to one relationship to the physical structure of production and consumption .

It’s my job to keep track of the actual growth of the physical processes and recommend to the policy board changes in the symbol structure to match those in the physical structure

These two simple rules are the opposite of what we do Money supply is NOT linked to the physical economy The increase in money supply goes to those who hold assets (the 0.1%)

Money is symbolic - it can simply be added without incurring any debtThe requirement that the amount of money matches the physical world would stop any excessive inflationary pressure

@donzelion | I think the Japanese might look at your three options and come to a different conclusion about which is least likely than we would. I wrote off (1) for them based on history, but would applaud if they proved me wrong.

Collectivist societies are different from ours and my external impression is that the Japanese find the robots to be the easier path.

Regarding typists (I made part-time money that way back in my stone age student years), I'd say they were willing to pay for low error rates and bend over backward if one had enough people skills to do other tasks. Pure typists in the pool were paid for speed, lack of errors, and willingness to focus. Out in the front office where part-time typists were needed, they paid for a smooth phone voice and calm demeanor when faced with several simultaneous demands. Speed and error rate were a bonus that MIGHT add to the wage.

As a temp, I startled one customer by bringing him error free memos on the first round. His regular secretary generally needed three. I could see the gears turning in his head when he asked me how I did it. I explained my mother deserved to wear a cape with a big G on it done in Superman style. Grammarian. I wasn't interested in full-time work for him, though, so I imagine the lady I filled in for got an earful when she got back.

My spelling skills have waned dramatically as I've grown used to spelling correction with installed dictionaries. My job now is to teach my dictionaries the jargon I need. The skill I had can be done by a moderately competent app with a dollop of AI. I'm fine with that. The job would have been a drudge for me as anything more than temp work.

If, like Duncan_C & Reformed_T, you think that that "Money supply is NOT linked to the physical economy, (that it is merely) is symbolic (and) it can simply be added without incurring any debt", then Off-To-Venezuela with you where it now costs over 250 thousand Bolivars to buy a dozen eggs & 250 thousand Bolivars is the AVERAGE monthly wage.

The very idea that the "Money supply is NOT linked to the physical economy" displays tremendous ignorance of the Supply & Demand dynamic which dictates that **supply inversely correlates with value** which means that currency is worth LESS when you create MORE currency.

Even though we PRETEND that money represents wealth, money is NOT wealth because actual wealth cannot simply be created out of thin air with a magical incantation & printer's ink. TASAT called Callahan's Crosstime Salon (a series), written by Spider Robinson, that discusses the difference between the representation of wealth (aka 'money') & wealth itself.

Now, if you'll excuse me, I have a hot date with a magical 2D anime representation of a woman who is EXACTLY THE SAME as an actual woman, only better, because reality is only symbolic & everything equals its Orwellian opposite.

Duncan: yes the fed should simply “helicopter drop” funds into the lower middle class and moneyvelocity would rocket. Ideally as wages to repair infrastructure.

Donzel there’s no need to cater to him. Their cult claims to favor competition (“fighting space” and misquoting Adam Smith)

But they represent the phenom of feudal cheaters who always crushed fair competition, preventing its benefits for 5000 years.

They are cheaters to the core. They hate “welfare” not because it wastes, but because – when done well- it unleashes waves of talent that had been safey and previously repressed. Lords are cowards who rig things for their sons because they know the brats can’t compete on a level playing field.

From Larry's response to Politically Annoyed:Other countries get it. Many years ago, radio host Thom Hartmann had a guest who was a wealthy German businessman, and he was defending their high taxes and robust social safety net. His justification was, "I don't want to be a rich man in a poor country."

I immediately remembered the old definition of foreign aid: A device for moving money from the pockets of poor people in rich countries to the pockets of rich people in poor countries.

And, inspired by donzelion and Aristotle: Aristocrats are the descendants of oligarchs who have lost power. Admittedly, this is because the ones who are noticed today are smart, talented, and doing well on their own - and liking it. Otto von Habsburg comes to mind, as well as Marion von Dönhoff.

The term 'Fighting Space' referred to a comment by a visitor named Yana who exhorted our culture to "Fight Space!" (as in to redirect our intraspecies aggression toward the conquest of Space rather than toward each other), but this is the typical misdirection I've come to expect when it comes to ANY potential funding decrease to our bread & circus social welfare state.

Even though people will ALWAYS require food, shelter & assistance for as long as they live, this pressing universal outcome equality imperative (which many mislabel as 'fairness') just takes away resources from research, development, infrastructure repair & the conquest of space.

Social Justice has become a Terrible Trivium, aka the Demon of Petty & Inconsequential Tasks, that gobbles up an ever increasing proportion of our GDP with every passing day.

In effect, the progressive is a greedy child who insists he can HAVE IT ALL without effort, labour or sacrifice as exemplified by the accumulation of social debts that can & will never be repaid.

reformed tourist:One last thing, every time I hear someone declaim about Balanced Budget amendments and the need for the gosh-danged gubmint to deal with the budget just like companies and Fred & Myrtle at their kitchen table, I have to ask one question: Do companies, let alone Fred & Myrtle print money that is recognized as legal tender?

Alfred argues that they should be allowed to do so. :)

Complementary to your point is what Paul Krugman often points out--that if someone is accumulating or saving money, someone else must be deficit spending, just as if some countries are net-exporters, then others must be net-importers. My spending is Your income, and vice versa. During a recession, income is already hard to come by. If the government is forced not to spend, that reduces the income available to individuals. It's a death spiral.

Duncan Cairncross:The requirement that the amount of money matches the physical world would stop any excessive inflationary pressure

In theory, yes, and I have argued that very point for decades.

However, in practice, all consumer goods are not equal at all times. You could have a "run on pizza" in which everyone suddenly decides to acquire pizza, leading to a short supply which drives the price way up, even as there are plenty of other consumer goods available to support the money supply.

My favorite quote attributed to Yogi Berra: "In theory, there's no difference between theory and practice, but in practice, there is."

locumranch:If, like Duncan_C & Reformed_T, you think that that "Money supply is NOT linked to the physical economy, (that it is merely) is symbolic (and) it can simply be added without incurring any debt", then Off-To-Venezuela with you...

You might want to actually read for comprehension before accusing people of saying the opposite thing of what they actually said.

Duncan was lamenting that the money supply was not currently tied to the real world, and his prescription for a solution was to make it so.

Seems to me that the new oligarchs are consistently Anti-Trump, Pro Fact, and in favor of potentially progressive economic experimentation. Trump's support has come heavily from the least well off segments of society. Who exactly are the oligarchs that you are calling out?

Jason Solinsky:Seems to me that the new oligarchs are consistently Anti-Trump, Pro Fact, and in favor of potentially progressive economic experimentation.

Which oligarchs are those? Not the Koch brothers or Sheldon Adelson. Rupert Murdoch may not personally like Trump, but it hasn't stopped FOX News from getting into bed with him, and Murdoch fails on those other tests.

Buffet, Gates, Bezos, Page and the other Brin. Just about everyone in Silicon Valley. The Koch brothers hardly seem representative of the new Oligarchy. Their wealth comes from a previous generation (and their politics too).

It speaks volumes that Larry_H's new heroes are Stormy Daniels & Lawyer Michael Avenatti as both are RENT-SEEKERS extraordinaire who provide zero social value in return for the compensation they demand. Michael Avenatti is a greedy bottom-feeder determined to extract reward from a biased legal system and Stormy Daniels is, quite literally, a slum-lord who has rented out her overpriced, poorly maintained & much depreciated 'assets' to all comers.

"NOT linked to the physical economy.....Money is symbolic - it can simply be added without incurring any debtThe requirement that the amount of money matches the physical world would stop any excessive inflationary pressure"

The overarching fact is that EVERYTHING involved in finance is a "convenient fiction;"Even, money.

The purpose of money is to provide a representational unit of worth that is transportable between individuals to commit (intentional) commerce.

E.G. you dig a ditch for me -> I, the baker give you 3 wads of dough that we in our little slice of Eden all agree are "worth" your labor -> you take the dough and give 2 to the woodcutter to "pay" for the branches you got from him -> and 1 to the farmer for the turnips you plan to eat tonight -> the woodcutter and the farmer -> come to me to "buy" a cake for the party they are throwing for their soon-to-be mated children -> I take my dough back and toss them under the straw on which I sleep for safekeeping = commerce.

We modern sophisticates ca. 1600, go a step better, since carting large amounts of dough is a pain in the something to transport very far. We now use a representation of a bunch of dough (or whatever). We not only use those representations of dough's worth, but we exchange those representations; even to the point of selling them as a means to "share" in the worth of something that is yet to be realized, e.g. harvested, mined, delivered, built etc.

And we go a step even further because in our little slice of Eden, we've may have determined the worth of a given wad of dough, but in the next slice over, they use a different measure... what's more, even if we decide on an equivalency, it doesn't make sense to transport our dough to them or vice versa in over-large amounts so we've invented "bills of exchange," denominating value at a distance that are convertible (redeemable) which themselves become instruments to be traded as "promises" of representations of value.

And, just like dough, every time one of these things changes hands, a little bit sticks to whoever handles it... that can add up to a lot of dough in itself...

(with apologies to Neal Stephenson who did it much better - see "The Confusion" book 2 of the Baroque Trilogy. Particularly the "Party in St.-Malo" chapter where Eliza uses the guests at a salon to demonstrate the above in much greater and more accurate detail)

The very concept of Money and all its derivatives (and I use the term advisedly) is both malleable (like dough and its "worth") and frangible (should another party change their minds as to its equivalent "value" - e.g a harvest failed, a ship sank with all its cargo, I covet your land and wish to drive your "sales price" down.

Also, Dr, Brin mentioned a "helicopter drop" of money to the middle classes to increase MV as a way to hasten the re-building of infrastructure. This is precisely, albeit a one shot situational usage, of the circulatory nature (engine oil) of transfer payments. One could even call it a Universal Basic Bonus (UBB as opposed to a UBI). Again, a convenient fiction to accomplish a specific necessary goal.

Which brings us to "debt." I'll suggest that there is 1 aspect of "debt" that is overlooked. Certainly too much debt is a bad thing, but how much is too much? For a family, that's a number that is relatively easily derived, as it is for a company as both must operate on an income/outflow ratio to meet their respective survival and (desired) prosperity goals. Nation/States are different in that they are responsible to keep commerce itself viable and it is they that Print the Money and Regulate the Exchange of (all) Bills. As such, their undertaking debt is a different kind of promise in the future. By taking on a reasonable amount of debt AND CARRYING it, they are making a promise ON the future, essentially stating there WILL BE a future, perhaps the most important "convenient fiction."

As these would come from the upper middle/middle class and be spread among the middle/lower class, that's probably futile. Here's a better plan:(1) Tax capital gains the same as ordinary income. The simple process of acquiring assets, holding them, and growing 'wealthy' while earning minimal taxable income is a major part of the problem. (2) Tax foreign capital gains HIGHER than ordinary income - and dramatically escalate enforcement. (3) Tax branded properties with a special extension of the property tax. Currently, hotel chains and other major brands avoid property taxes, taking a 'value added/management' interest in the profits of a property with their name on it, but leaving actual owners (whose names almost nobody ever sees) to pay the taxes. To an outsider, every 'Trump tower' is owned by Trump, every Wal-Mart owned by Wal-Mart - to an insider, the ownership interests are far more complex, with the operator only taxed based on their claimed income, rather than the property portion underlying that income.(4) Develop bonds targeting (1) 'affordable' housing units (in the $300k range, still a stretch for most millennials), (2) college debt repayment, and (3) transportation infrastructure, esp. public mass transit (non-freeways). Make THESE instruments tax-advantaged, instead of securities.

That's significantly more realistic than helicopters of cash, and takes advantage of historically low interest rates today to ensure this one-off opportunity gets used to help jumpstart families, rather than to add multiples to today's already quite wealthy. There is nothing wrong with being wealthy - nor is there anything intrinsically good about rewarding the wealthy with a vast pool of subsidies (and then whining about welfare for the non-wealthy).

Reformed Tourist: "Certainly too much debt is a bad thing, but how much is too much?"

By and large, debt incurred to meet current obligations = bad debt; debt incurred to create new opportunities for a larger income stream = good debt. It's not a matter of how much is too much, but rather, a matter of whether the debt is reasonably likely to result in new opportunities.

Medical debt? Something's broken in the system: this isn't debt to create new opportunities, but debt incurred to stay alive. There's an element of extortion at work in this sort of debt: "Well, I know it's $100k for the procedure, but you can skip it and die in 6 months...or suffer enormous pain for the rest of your life..."

College debt? Used to be the 'safest bet' of all debts, but now is no longer anywhere close to the same risk/reward calculation as that which applied even 20 years ago, not for the vast majority of debt holders.

Housing debt? Depends on whether the debt relates to 'prime' or 'subprime' borrowers - in general, we do better when housing reaches to the less creditworthy rather than being restricted to a pool of investors buying houses to convert them into rents.

Corporate debt? Depends on whether the debt creates new opportunities for the company, or whether it merely rewards on pool of investors displacing another (Toys R Us) - or is used to purchase shares to prop up values.

Government debt? More complex story. Paying it down and managing it has long been a Democratic agenda item (with Democrats actually achieving it, and Republicans aggressively increasing it while whining about others being 'spendthrifts'). Obama didn't do so as much as the Clintons, but Bill took office after a modest post-Cold War 'tiny' recession and benefited from one of the all-time great bubbles, while Obama took office after a much worse recession (verging on Depression), and experienced a (hopefully) less bubbly recovery. Trump's plan appears to be to increase government debt during a time of generally good economic performance - and let someone else pay the bills. Like millennials...

5) Impose a transactional tax (smallish percentage i.e 1-2% perhaps - maybe a sliding scale which would be a progressive factor) on all security exchanges over a given (low) threshold (i.e 1000 shares or $100,000).

locumranch:It speaks volumes that Larry_H's new heroes are Stormy Daniels & Lawyer Michael Avenatti as both are RENT-SEEKERS extraordinaire who provide zero social value in return for the compensation they demand. Michael Avenatti is a greedy bottom-feeder determined to extract reward from a biased legal system and Stormy Daniels is, quite literally, a slum-lord who has rented out her overpriced, poorly maintained & much depreciated 'assets' to all comers.

You speak volumes all right, but not in the way you intend.

As far as I'm concerned, Michael Avenatti is saving the republic, and is worth whatever compensation he derives in that effort. Whether or not that's his personal motivation is immaterial. I said nothing about Stormy Daniels herself, but your evaluation of her assets also speaks volumes about your own self. I don't see anything depreciating, and if anything, the recent flap has caused her assets to greatly appreciate in value, even if we stick to strictly monetary consideration.

Trump imagines himself the king of leveraging celebrity for personal gain and for throwing his weight around to intimidate adversaries. Those two are kicking his butt at his own games, and I for one applaud until my hands are raw.

I expect you'd find that Dr Brin's opinion of those individuals, for good or for ill, were pretty darned consistent long before Trump was any sort of factor. To the extent that he considers them "good", it's because they value the society that allowed their prosperity rather than claiming to owe no one nothin'. As opposed to some people I could name.

donzelion: "Well, I know it's $100k for the procedure, but you can skip it and die in 6 months...or suffer enormous pain for the rest of your life..."

That's exactly why I consistently argue that the free market is a poor representation of what goes on in health care. The waters are muddied by the oft-ignored differences between emergency care, elective procedures, and regular check-ups. But the emergency/urgent type of care is much more analogous to a police or fire department than to a corner store.

Right! Yes, the critically injured or ill individual with their comprehensive HS diploma is going to be able to make a cost/benefit analysis while bleeding or unconscious. Or after getting discharged from the ER after being stabilized with a 'scrip for opiates, or barring that, excruciating pain.

Of course, his/her loved ones, perhaps one has a PhD in English Literature - a true savant re Dickensian subtext - will come to his/her loved one in need, compartmentalize their own emotions and coldly, objectively weigh the merits of competing therapy options with an emphasis on economic reality...

Right!

Having heard my wife narrate tales of helping seniors negotiate signing up for SubPart D when you HAD to do it online and octogenarians in nursing hones without younger family to help them and had never touched a computer in their lives had to decide on which plan fit their situation best...

@reformed tourist | You won’t find me on the sidelines jumping up and down demanding balanced budgets. You won’t find me advocating an analogy between the federal budget and the household budget of Fred & Myrtle either. Even the corporations are different.

As Larry pointed out, though, I generally DO advocate for proper recognition of private debt instruments as currency. Doing so a couple generations ago would have been insane. We couldn’t manage the exchange rates or aggregate private currencies into trading blocs at the speed needed to keep them at least semi-liquid. We can now, though.

Every time I offer to buy lunch for a co-worker on the expectation they will do the same another day, we are creating a kind of currency. It trades over a very short range, of course, but it might expand if another co-worker joins us on another day. We manage these things locally relying mostly on one of the oldest things of value to us; namely our reputations mediated by direct and indirect reciprocity.

I advocate these small currency classes because when a lack of trust occurs in the big ones, people naturally turn to the small ones. Balancing budgets CAN be accomplished without rigid amendments, but creditors must have alternative investments before it will happen. Credit supply does more to balance cash flows than any law ever will.

Not everyone will issue their own currency, but I don’t see why corporations shouldn’t. The trade value of their paper can help moderate some of the behaviors allowed to them that aren’t tolerated in natural persons. The only reason I don’t jump up and down as a zealot for this is I think we still have a ways to go in educating our foolish neighbors who would offer credit as though they were buying equity. Creditors are supposed to be some of the most hard-nosed people ever to grace the planet. They gain little if a debtor benefits greatly from using their cash and have everything to lose if a debtor goes under. Hard-nosed is just the beginning.

After reading Hofstadter’s “Surfaces & Essences” book, I learned to see dictionaries as a useful tool for understanding the tips of gigantic icebergs. As guides to language usage, they offer a start to people missing parts of a larger vocabulary, but they become gigantic if one looks even slightly below the water-line.

In that book, he points out that ‘words’ are just a start too. Our spoken languages have all sorts of things in them that are similar, but covered in different books. Compounds, idioms, phrases, and even things we build on the fly can be difficult for non-fluent speakers. One example in the English side of the book involved ‘sour’ and ‘grapes’. Anyone who’s been around a while knows that putting them together evokes more than the sum of the parts. One can have a ‘sour grapes’ story if one comes reasonably close to the olde fable. Even if one hasn’t read the fable, a fluent English speaker probably has several story variants in their heads that could be used to ‘explain’ the phrase to a non-fluent speaker.

Now I have another. Locumranch’s description of Stormy Daniels as a slumlord fits perfectly.

Alfred Differ:I learned to see dictionaries as a useful tool for understanding the tips of gigantic icebergs. As guides to language usage, they offer a start to people missing parts of a larger vocabulary, but they become gigantic if one looks even slightly below the water-line.

I just recently read an article--God knows where now--that talked about how dictionaries often miss a crucial point. The example the author used was the word "band". Look that word up in a dictionary and you'll find dozens of separate definitions, ranging from a thing girls wear in their hair to a musical group to a collection of thieves or brothers or brothers in arms to a rubber thingie used to shoot spitballs (among other uses). But they'll be listed as if each of these is a separate word that only happens to be spelled the same and sound the same. Most likely, the dictionary won't explain what concept of "band-ness" all of these definitions have in common.

Now I have another. Locumranch’s description of Stormy Daniels as a slumlord fits perfectly.

I was ready to most strenuously argue with you until I realized just what you are asserting fits perfectly with what. With most anyone else, I'd expect that was simple confusion, but I expect you did it deliberately. :)

I used to be strenuously "agin" public debt - making the children pay!

Then I worked for the Local Authority - building expensive long term assets - like water treatment plantsDebt made a lot more sense to me then - were were building assets that would be used by the next generation

It was also a Red Queens Race - the ideal was to keep the average "age" of our infrastructure the same - or even reducing slightly - so we had to run quite fast to stay in the same place

Reformed/Larry: It's been quite a few months since I diverged into my ethical frameworks theory...there are only four complete ethical systems in circulation in Western culture, each of which reflects a crucial and distinct role:

We want our soldiers to think like Aristotlian habituated soldiers: following orders, displaying virtues (esp. courage, but all the rest as well).We want our doctors to think like Kantians, doing everything they do with the expectation of what would be properly universalized, never using a person as a means to an end.We want our businessmen to think like Utilitarians, maximizing happiness and minimizing pain for us all (occasionally redefined as 'profits').And we want our scientists to think - much like our priests and prophets - ontologically, peering into the precise meanings of 'what is' and 'is not' to get at what is 'true'

Only one of the four key traditions fits neatly into a notion of a 'free market,' and if anyone in one role tries to take on the system of another, it will create a cognitive dissonance at best, and impede performance within their function: a mess. Soldiers following or refusing to follow orders based on maximum happiness, or trying to operate a categorical imperative when you must use some soldiers as a 'means' to the end of fulfilling a mission? Doctors maximizing profits? Everything gets screwed up.

Reformed/Larry: Sorry, put that out without linking back to why I was reviving that old conceit. In health care, we have doctors trying to act like Kantians, in a world often controlled by utilitarians operating through the doctors to extract as much money from the patients as possible. The doctors may do their work admirably, but the system in which they work can go unhinged, so that health is no longer the goal, and profit is instead.

Such is American healthcare, and why every other industrialized country moved toward a 'less free' market to try to keep their doctors acting like doctors.

Same issues would apply to our military: the second that the 'military industrial complex' becomes about ensuring the maximum profits, a great deal of the professionalism in the military will be abandoned, and instead, we'll discover how easily the soldiers could enrich themselves at the public's expense. Yet show me a single billionaire soldier - that is, a soldier who earned his billions through soldiering: such a person does not exist in America, but quite a few soldiers have done far more and given far more for the country than any billionaire ever will.

I've come around to the notion that authors of short fiction are potent forces of change in a language. They give bite-sized meanings to our short phrases that don't fit in a hierarchical description of lexical elements. That Star Trek TNG episode everyone knows always comes up, of course, but I think it goes much, much wider.

Hofstadter argues that its analogy all the way down. I think he is right and it's caused me to rethink how physics and mathematics get taught.

Duncan Cairncross:I used to be strenuously "agin" public debt - making the children pay!

Then I worked for the Local Authority - building expensive long term assets - like water treatment plantsDebt made a lot more sense to me then - were were building assets that would be used by the next generation

I can't get behind the drive to impose fiscal responsibility on the government by way of inflexible rules such as a balanced budget amendment which would have made it Constitutionally impossible to fight WWII.

donzelion:if anyone in one role tries to take on the system of another, it will create a cognitive dissonance at best, and impede performance within their function: a mess. Soldiers following or refusing to follow orders based on maximum happiness, or trying to operate a categorical imperative when you must use some soldiers as a 'means' to the end of fulfilling a mission? Doctors maximizing profits? Everything gets screwed up.

One of those things is not like the other in that we as Americans do seem to expect doctors (like anyone else) to maximize profits.

I'd add small-d democratic government offices and journalism to the list of professions whose functions fail when they are forced to work to maximize profit.

Alfred Differ:I've come around to the notion that authors of short fiction are potent forces of change in a language. They give bite-sized meanings to our short phrases that don't fit in a hierarchical description of lexical elements. That Star Trek TNG episode everyone knows always comes up, of course, but I think it goes much, much wider.

Until we started referencing "Darmok", I would have been very surprised to learn that anyone other than myself had any particular recollections of that particular episode. I found the final scene genuinely cathartic when the viewer realizes that he can follow the conversation with the alien vessel. But I thought that was just me.

Hofstadter argues that its analogy all the way down. I think he is right and it's caused me to rethink how physics and mathematics get taught.

Heh. And I understand what you're saying because I recognize "turtles all the way down." A ridiculous, pseudo-mythological image, but it does convey a meaning that might be hard to describe otherwise. Which leads me to rethink what you previously said about the importance of knowing about discredited theories such as phlogiston.

A dictionary really is "turtles all the way down." I remember reading something in high school that suggested that dictionaries definitions are necessarily circular, as every word is defined in terms of other words. The implication was that dictionary definitions are useless in terms of conveying meaning, which sounds logically correct, but is simply false, and self-evidently so. Like proofs that bees can't fly. Or "You need experience to get a job."

Once again, "In theory, there is no difference between theory and practice, but in practice, there is."

North Korea threw President Trump’s planned summit meeting with its leader, Kim Jong-un, into doubt on Tuesday, threatening to call off the landmark encounter to protest a joint military exercise of the United States and South Korea.

The warning, delivered early Wednesday in North Korea via its official government news agency, caught Trump administration officials off guard and set off an internal debate over whether Mr. Kim was merely posturing in advance of the meeting in Singapore next month or was erecting a serious new hurdle....

Gotta take wry amusement at the snark, as gallows humor is all I've got left. Bold emphasis is my own:

http://www.electoral-vote.com/evp2018/Senate/Maps/May15.html#item-3

As part of his plan to keep immigrants out of the U.S., Donald Trump has cut the number of H-2B visas. These visas are needed by small businesses that import foreign workers for low-paying jobs involving hard manual labor that Americans don't want to do. Many small businesses need these workers to stay afloat, and the reduction may ruin them. Small business owners who voted for Trump and who depend on the visas are furious. These include landscaping businesses in Kentucky, crab processors in Maryland, shrimp fisherman in Texas, as well as construction companies and farms everywhere.

For example, Eddie Devine, who owns a landscaping company and who voted for Trump said: "I feel like I've been tricked by the devil. I feel so stupid." Of course, he is stupid. Trump promised during his campaign to cut off the flow of foreigners into the country, and sure enough, he kept his promise. Only now does Devine realize that his business—and many like it—depend on those foreigners. Devine is even more angry at Trump now because Trump got 144 H-2B workers for his properties since 2016, but Devine can't get any now.

We had the same thing with Temporary Foreign Workers up here under Harper's neocons. Can't get local workers at a wage you want to pay? Bring in TFWs who can only work for your company or go home, no other option. Got so bad that some mining companies were listing "speaks Mandarin" as a required job skill to guarantee that non of the recent;y-laid-off Canadian miners could apply for the jobs. Fort Mac had TFWs working in Tim Hortons (locals wanted more money, given (a) the relatively large number of better-paying jobs available, and (b) the high cost of food and housing (prices driven up by those better-paying jobs).

It's got a bit better under Trudeau, but there's a lot of inertia in the system to overcome. I'd hoped to see more change than has happened.

Doctor Brin, please indulge me for this one act of naked self-promotion. I promise not to make a habit of it.

My second novel, "Earth Fall" is now available for purchase at http://www.zeppjamiesonfict... It can be found in hardback, softback, or ebook format.Also available for the time being: the PDF of the first novel, "Ice Fall". It's not absolutely necessary for the reading of Earth Fall, but helpful. And it's available, no purchase necessary.

I also have opened up a blog with some of my recent essays. Please feel free to exhibit a grand and glorious disregard for your vascular health and enjoy reading my thoughts!

Ever read Jane Jacobs’ “Systems of Survival”? It posits a similar (though an either/or rather than 4-part division) recognition that what are appropriate habits of mind for commerce are completely inappropriate for governance – and when the ideals of either “infect” the other, it is a corruption bound to end in disaster …

is a scientist, futurist and best-selling author. His novels include Earth, Existence, The Postman, and Kiln People, as well as Hugo Award winners Startide Rising and The Uplift War. The Transparent Society won a Freedom of Speech Award of the American Library Assn.